The Greater London Authority has written to councils explaining their new social housing responsibilities

Builders of affordable housing in London may have to negotiate with local authorities rather than the Homes and Communities Agency to get grants according to the Greater London Authority.

The GLA today wrote to councils detailing plans to devolve some affordable housing powers currently held by the London board of the HCA to London boroughs, as part of the government’s “double devolution” strategy.

If enacted this would mean that boroughs would be given indicative budgets, meaning that developers of affordable homes might lose grant to other developers within a borough if any particular scheme fails to come forward. Currently grants would generally be transferred to another scheme from the same developer.

Housebuilders and housing associations build the bulk of the affordable homes built in London each year, using £1bn in government grant.

The mayor’s housing advisor Richard Blakeway said: “This will mean councils will be able to invest in products, such as innovative homes for the intermediate market, which don’t necessarily confirm with the national programme, if it fits their local priorities. We want them to be innovative.”

He said: “It’s an opportunity for developers and housing associations to build a strong relationiship with the boroughs – talking to the boroughs more than the HCA. It’ll be very much for the boroughs to decide how things under done.”

Under the new system, the HCA would only be able to veto borough decisions if it was felt they compromised an authority’s ability to meet broadly agreed targets on affordable homes. Budgets would be allocated to local authorities following negotiation with the HCA.